Last Thursday saw a private meeting between Vincent Bolloré, chairman of Canal Plus, and the French media regulator, Conseil supérieur de l’audiovisuel (CSA). Reportedly he told the CSA that his flagship channel, Canal Premium, generated only about €20 million in EBITA in 2014. The news was carried in Le Figaro.

This prompted a flash note to investors on September 28th from equity analysts at Exane BNP-Paribas that the top-tier pay-TV service could actually be losing money for the operator.

Canal Plus Group overall generated €618 million in EBITA during 2014.

Bolloré also explains the recent moves at Canal Premium as a need to reduce costs ahead of major cost inflation in 2016-17 due to football and other programming right inflation, said the analysts.

The reports also indicate that the recent bout of cost-cutting at Canal+ is not over, while costs continue to rise. For example, the extremely popular ‘Le Gros Show’, anchored by one of France’s most popular hosts Cyril Hanouna (on the D8 channel) and produced for the channel by Hanouna’s production company, is going to cost more. Last year Hanouna’s company received €19 million annually in fees, and this will now rise – reportedly – to €50 million.

The bank’s analysts say: “Unless the scope of work dramatically increases this looks like a very steep price increase, representing a potential 5% hit to Canal EBITA (2-3% at VIV level). We doubt Canal’s margin on this show is very high, if positive at all. As a reminder, Canal will face in 2016-17 over €150m of increase in programming costs, or close to c10% of Vivendi’s EBITA.”

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